Jay, I di not think there was "disrespect" intended. If people read me "assiduously", they should realize that reasons for developing a "model" of what the future market direction might be, is simply to stay out of the way of major declines, more so than being in major advance. When both can be accomplished, great.
Larry quoted a very interesting snippet recently, it has to do with a paradox, namely that a trend has a higher probability of continuing in its direction despite the fact there is a 100% probability that at some time, it will reverse. My model have "Maginot lines" and support levels (or overhead resistance), breach of "maginot lines" are "ominous", but support level are bought. I sell when a stock reached my own target of either profitability or an over head resistance, I will also sell when approaching major overhead resistance. The current "maginot" line is according to my model (as well as Larry's, I believe) at 2052 (actually 2057) on the Naz, and I have two "support" areas, the 2250 (which if breached will get me fast to 40% cash) and the 2095 (which if breached will get me to 60% cash).
My target for the top of the current rally is still 2388, and as we approach this level my cash position will increase as well. That level will represent about a 50% advance from the lows set in April, and I think that we will go at least through a period of consolidation (2100 to 2400 or so for a good month or even two), where one buys at the bottom of the range and sell at the top. At some point, the nature of the next step should become clearer. I lack that clarity right now. But in general there are a number of "formations" that develop during such "consolidation" which might help differentiate between a bull market consolidation and a bear market 'topping action" or distribution. That is what we'll have to look for in the next few weeks.
Zeev |
